The Independent reports today that the Iraq Oil Law is close to completion.
Iraq's massive oil reserves, the third-largest in the world, are about to be thrown open for large-scale exploitation by Western oil companies under a controversial law which is expected to come before the Iraqi parliament within days
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The backstory to the Iraq debacle is the status of the known and supected Oil Reserves in Iraq.
Greg Palast and others have argued that a principal motivation for the US and UK's drive for regime change in Iraq was the fact that Saddam had signed development deals for exploiting Iraq's reserves with Non-US/UK national oil Companies (China, France, Russia) in anticipation of the lifting of UN sanctions. US/UK were shut out because of domestic laws that prevented such negotiations. War was the option selected to nullify those agreements, and put into place new agreements more favorable to the US/UK oil giants. Palast further argues that the administration was split into two factions, the NeoCons who advocated for a free-market regime that would allow for production outside OPEC control, thus weakening the geopolitical influence of the cartel, and the Bakerites/Realists/Saudi nexus, who wanted to bring Iraq production into the OPEC cartel, but with US/UK companies providing oilfield services and support under favorable Production Sharing Agreements (PSA's). Cheney, and others, have noted that about 90% of the world's Oil production capacity is unde the control of Nationalized Oil Companies, and this drives the NeoCons nuts.
Ahmed Chalabi has consistently argued that Iraq production could reach 10-12 Million Barrels per day, while the historic OPEC quota for Iraq has been about 2M BPD.
Decisions about the Oil Law were deferred in the initial Iraq constitution, because there was a significant disagreement in how the Oil Industry should be structured.
So the draft is coming to a vote, Is it good for the Iraqi's?
Supporters say the provision allowing oil companies to take up to 75 per cent of the profits will last until they have recouped initial drilling costs. After that, they would collect about 20 per cent of all profits, according to industry sources in Iraq. But that is twice the industry average for such deals.
Independent
What do the Unions think?
December 14th 2006 -- Leaders of Iraq's labour movement today criticised government plans to "hand control" over the country's oil production to multinational companies.
At a meeting in Amman, Jordan, leaders of Iraq's five trade union federations - between them representing hundreds of thousands of workers - called for a fundamental rethink of the forthcoming oil law, which is designed to allow foreign investment in the oil sector. The law has been prepared by an Iraqi cabinet committee, and is expected to be presented to the Iraqi parliament for ratification in the coming weeks.
The opposition by Iraq's powerful trade unions will dismay the US government, which is keen to see the law in place by the end of the year. Since the summer, US officials have been calling for an oil law to encourage foreign investment in Iraq's oil - a call reiterated by the Baker-Hamilton Iraq Study Group in its report last week. [1]
The labour leaders criticised the major role for foreign companies in the draft law, which specifies that up to two thirds of Iraq's known reserves would be developed by multinationals, under contracts lasting for 15 to 20 years. [2] This policy would be a radical change for Iraq's oil industry, which has been in the public sector for more than three decades - and would break from normal practice in the Middle East among Iraq's neighbours.
In a joint statement, the trade unions rejected "the handing of control over oil to foreign companies, whose aim is to make big profits at the expense of the Iraqi people, and to rob the national wealth, according to long-term, unfair contracts, that undermine the sovereignty of the state and the dignity of the Iraqi people". The statement added that this was a "red line" they would not allow to be crossed.
Political Affairs
Watch this one folks-this is the reason why the Amin has been willing to accept this death ridden stalemate in Iraq, pending the outcome of this legislation.